Paradise Entertainment ceases management services at Macau's Casino Waldo as 2019 profit falls - IAG
Thursday 26th March 2020
Macau's Paradise Entertainment Ltd has revealed that it has ceased providing casino management services for Casino Waldo due to escalating costs and the impact of COVID-19 on gaming revenues.
The news formed part of Paradise's FY19 earnings announcement, filed with the Hong Kong Stock Exchange overnight, in which the company revealed an 80.1% decline profit for the year ended 31 December 2019 to HK$10.6 million, down from HK$53.2 million.
Providing an update on its recent operations, Paradise said that, "Considering the recent requirement to invest further for additional monitoring systems and equipment to Casino Waldo to comply with new regulatory requirements, which we considered that might be not recovered before the end of the existing gaming concession, the relative high operating costs of the casino, and also the adverse impact from the recent outbreak of a respiratory illness, following the expiration of the related service contract on 29 February 2020, the Group decided to cease providing casino management services in Casino Waldo since 1 March 2020 and did not request for renewal or extension of the service contract."
Paradise will continue to provide management services for Casino Kam Pak Paradise "so as to maximize the return from the provision of casino management service in this casino to the Group," the company said.
Paradise reported an 8.7% increase in GGR at Casino Waldo in 2019, however the property contributed negative Adjusted EBITDA of HK$27.5 million. By contrast, Casino Kam Pak Paradise saw GGR fall by 11.2% to HK$692.7 million but reported Adjusted EBITDA of HK$141.5 million
Group-wide revenue for the year ended 31 December 2019 actually grew 1.5% to HK$1.18 billion due to higher revenue from the sale of electronic gaming equipment and systems. Revenue from the segment almost doubled to HK$169.9 million following the sale of 799 Live Multi-Game terminals and the provision of upgrading services to 1,051 terminals at various casinos in Macau, primarily MGM Cotai, The Venetian Macao and City of Dreams.
Paradise said it continues to view technological innovation in ETGs and slot machines as a means of improving efficiency and reducing costs, stating, "The Group is dedicated to innovate in the gaming equipment industry using top-notch and innovative technology to create good gaming products that are primarily catered for mass market.
"The Group shall continue to focus on optimizing table productivity in the casino under our management by applying cutting-edge gaming technology that has enabled our GGR per table per day in the mass segment to rival the tables in other casinos in Macau. The Group will follow our unique business model to embrace more synergies of our two business segments and complement to the development of our high-tech products."